Outages drive smart grid, and muni legislation

Storms + outage anger = muni movement

We've written extensively in this space about the prospects for municipalization by Boulder, Colo., now a more tangible proposition after its citizens narrowly voted earlier this month to explore the possibilities. (See "Boulder Rejects Xcel.")

As you probably know, the drivers in Boulder's case are many. The short version is that the city aspires to control its energy destiny. Among the many factors in the mix: cutting carbon emissions, ramping up renewables, using local resources and cutting ties to Xcel Energy. All but the last item on this list would depend on adding smarts to the grid.

Of the many factors driving that last item, it's worth noting that Boulder's simmering resentment toward its power provider may provide the closest parallel to municipalization efforts elsewhere in the country.

What a difference 2,000 miles make. On the East Coast, millions of people, battered first by hurricanes and tropical storms, then an early winter walloping, endured extended outages of electricity service from many large investor-owned utilities. Storm-related outages, of course, have been cited by many IOUs to justify their proposals to add intelligence to their grids. (See "ComEd Wins Smart Grid Okay.")

But will that argument for grid modernization work going forward? Certainly, this fall in the East, outrage ensued over the outages. The immediate environment was not, shall we say, conducive to explanations of how a smarter grid might have improved things and how much it will cost ratepayers.

(Note that we lack crucial information here: How did small- and mid-sized municipal and cooperative utilities perform at service outage and restoration under the same conditions? And, what role might scale play in similar efforts by the large IOUs? Anyone: is there a lineman-per-mile of poles-and-wires benchmark in the industry?)

As the first storms approached in late August, I was impressed with what the utilities said about their preparations for the impacts, particularly in terms of public outreach and outage/restoration notification, and I wrote about it. (See "BGE Handles Howling, and Hurricane.") Having an appreciation for the power of Mother Nature and the magnitude of the challenge of delivering, maintaining and restoring service, I had empathy for the utilities. Even after outages continued after the late October snowstorm. Chalk it up to those 2,000 miles and the fact that I could watch television news coverage of the debacle from the comfort of my powered-up home.

Then I heard details that lent credence to the complaints that preparedness and organization were lacking. A colleague tipped me off that he had been without power for six days, leading him to take refuge at a relative's home hundreds of miles away. In some cases, restoration information was overly optimistic. He was not alone.

In the case of Connecticut Light & Power, the outrage led to yesterday's resignation of Connecticut Light & Power's CEO Jeff Butler, to the creation of two new positions—one to lead emergency preparedness, the other to lead infrastructure hardening—and to an internal evaluation of its preparedness by a consultant. Perhaps more stunning, an investigation by the Connecticut Attorney General will examine whether laws were broken by the utility. This tends to counter the initial appearance that legitimate-sounding claims by utilities that all that was humanly possible was done to prepare for the storms and restore service afterwards.

Out of the back and forth, there was nuance. One editorial writer in Connecticut suggested that the storm was overwhelming and that, despite examples of disorganization, the utilities' preparedness levels and maintenance efforts were approved by state regulators. Oversight was the problem.

Now to the upshot. In neighboring Massachusetts, the storms also wreaked havoc, outages were widespread and emotions ran high, leading to vilification of the state's four investor-owned utilities, including NStar, National Grid, Unitil and Western Mass Electric.

Enter House Bill 869, which represents a decade-long effort - thwarted til now, proponents say, by utility lobbying - that would make it easier for cities and towns to take over their distribution systems from the IOUs. State law already provides a process for municipalization, but gives IOUs veto power. The bill purportedly would tilt the balance away from the utility and toward the municipality. While Massachusetts has 41 "munis" today, no city or town has formed one since 1926. That will change if the Massachusetts Alliance for Municipal Electric Choice (MAMEC) has its way.

Back to parallels with Boulder. In the foothills of the Rocky Mountains or in the hills of Massachusetts, cities or towns seeking to municipalize would undoubtedly have to modernize their grids. In the former case, smarts would help integrate massive amounts of renewable resources; in the latter case, intelligent switching could limit outages and self-healing circuits could speed restoration. In both cases, intelligence on the grid would create efficiencies in operations and maintenance that presumably would (debatably) keep costs under control. In both cases, cities and towns likely will find themselves battling their incumbent service provider and facing administrative, technical and financial challenges.

Will "outage outrage" be enough to power HB 869 into law? Will any cities or towns take the plunge on municipalization as a result? What role will the promise of grid modernization play in these decisions? And did anyone imagine that a smarter grid could be used to argue for and against so many disparate objectives? Finally, what would be the effect of municipal defections on IOUs and their revenue, earnings and stock value?

Comments

Will we see "Occupy The Utility" Movements?

- Nov 18, 2011 - 4:39 PM

Sending a message across the 2,000 mile difference, as spoken of in the article, can be accomplished in milliseconds with today's communications technology.A concern for the utility industry is whether the Smart Grid technologies will give rise to accelerate the "mini movement".I see it developing as a form of the "Occupy Wall Street" movements which I'll call here "Occupy The Utility".For utilities, it actually started before the "Occupy Wall Street" movement with the "No Smart Meter" backlash.It may just be my perspective, but it does seem like the push back to utilities is growing.My concern is, are we listening?The major power of these movements lies in their grassroots base.Those are the types of groundswell uprisings that can grow quickly and turn into a tsunami.A case in point is what happened to the nuclear industry in the US over the last three decades.Grassroots efforts turned the opposition to nuclear power into a tsunami that has drowned nuclear efforts in the US.Those same grassroots efforts have also been very successful in stopping the building of new transmission lines.

When you first take a look at Boulder, Colorado and the outage uproar on the East Cost, it seems to be about totally different issues; but in reality, the same underlying forces of these movements lie in the public's growing distrust of utilities to effectively act on behalf of the public's interest.The use of electricity to better our lives is fundamental to our lifestyles.This is the case worldwide and has even shown up in public outcries over electric outages in Pakistan "Taliban blow their fuse: Electricity first, Shariah later".The Taliban has issued threats to the utility executives in an effort to push them to do something about the frequent power outages in that region.

For utilities, these grassroots uproars could breathe new life into the desire for municipalization of local communities.Part of my reasons for saying this is based on some blogs from the city of Wallingford, Connecticut that I was able to find with a few Google click searches.These statements, from an existing municipality, speak louder than any other utility statements I've heard to date and should be a wakeup call for the industry:

My prediction for smart grid technologies and the municipalization movement is that these technologies will do what other technologies did for large industrial and commercial electric users.They used that technology to become aware of their power usage.This led them to figure out beneficial ways to aggregate and reduce their costs.

Outages and Smart Grid

- Nov 18, 2011 - 1:04 PM

The underlying reasons utilities have so many outages and the reasons it takes so long to restore power after a major storm are that there are too many overhed netowrks, the networks are aging, and poor vegetation management. Until these issues are addressed there will be no substantial improvement in reducing the impact of storm related outages. Resolving these issues is expensive but so is the impact of the storms on the economy.

Smart Grid applications help in identifying outages quickly (and detecting false outages) but that doesn't have much impact on the total restoration time when a hundred thousand residences are without power and restoration times are measured in days.

Micro grids, special energy sources, and self healing help some but for the most part most networks don't have much of these advanced capabilities. These capabilities help repower the consumers who are "down network" from the outages but they do nothing for the customers that are directly impacted by the outages.

To solve the real problems utilities must committ to more underground networks, replacing aging facilities, and effective vegetation management. The rest including Smart Grid is just window dressing when a storm really hits.

Bravo

Strong argument for a non-confrontational approach between city and provider. This is essentially the approach being taken by Fort Collins, Colo., with its FortZED project, I believe.

Perhaps the Boulder case frames a political solution, where the Fort Collins case frames a technical solution? It will be interesting to watch as each unfolds and see which one was more effective, and cost-effective.

Municipalization Lite

- Nov 18, 2011 - 6:54 AM

The path to municipalization, as Boulder will no doubt discover as it proceeds down that path, will be expensive and complex. Unwinding the investment by IOU in assets required to operate the municipal distribution grid could take years of haggling and in the end, cities and citizens will be stuck with a large debt. The price of independence will be high in that scenario, but no doubt, some communities, like Boulder, will consider it a bargain at any price.

Consider instead a more gradual path to energy independence, whereby city leadership begins to invest in distributed energy resources such as combined heat and power gensets in its office buildings, solar PV panels on its rooftops, EV charging stations in its parking garages, energy efficiency retrofits of its building envelopes and electrical appliances, including spray foam insulation, high efficiency lighting, and high tech HVAC systems. By working with its constiuencies, including economic development agencies, chambers of commerce, neighborhood associations, and school districts, city leadership can expand its influence and reduce local reliance on grid power piecemeal as technology matures, gradually taking more control over their collective energy destiny, while allowing the IOU to do what it does best, operate an efficient distribution grid. And reducing grid consumption - including reducing peak consumption - may do more to get an IOU's attention than anything else.

Rather than look at this as a black and white debate between investor-owned grid and city-owned grid, perhaps we should expand the discussion into a future scenario involving a smart consumer, one that envisions grid-delivered kWhs, on-site kWhs, and negawatts, blended in harmony via a smart grid?

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